TD
UNITED
NATIONS
United Nations
Conference
on Trade and
Development
Distr.
LIMITED
TD/B/53/L.2/Add.3
2 October 2006
Original: ENGLISH
TRADE AND DEVELOPMENT BOARD
Fifty-third session
Geneva, 27 September – 2 October and 10 October 2006
Agenda item 12
DRAFT REPORT OF THE TRADE AND DEVELOPMENT BOARD
ON ITS FIFTY-THIRD SESSION
Held at the Palais des Nations
from 27 September to 2 October 2006 and 10 October 2006
Rapporteur: Ms. Ana Inés Rocanova (Uruguay)
Agenda item 5 (Post-Doha)
Speakers:
European Commission
Brazil
Kenya
Mexico
Canada
Egypt
United States
Chile
China
Angola for the African
Group
Note for delegations
This draft report is a provisional text circulated for clearance by delegations.
Requests for amendments to statements by individual delegations should be communicated
by Tuesday, 17 October 2006 at the latest, to:
UNCTAD Editorial Section, Room E.8106, fax no. 917 0056, tel. no. 917 1437.
GE.06-
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REVIEW OF DEVELOPMENTS AND ISSUES IN THE POST-DOHA WORK
PROGRAMME OF PARTICULAR CONCERN TO DEVELOPING
COUNTRIES
(Agenda item 5)
(Continued)
1.
The representative of the European Commission expressed his appreciation to the
secretariat for the background note. The suspension in negotiations in the Doha round did not
mean that the round was dead; the situation was, however, serious and called for an
appropriate response from all concerned parties. While all those involved had reiterated their
commitment to the successful completion of the round, there was no room for complacency
as the round was still at risk and the next few months would be crucial. The question was not
whether, when or on what basis the negotiations should be resumed: a window of opportunity
for a resumption existed between November 2006 and March 2007, and the basis of
negotiations should be the existing mandates and conditional offers made up to July. The
immediate question was how to start, but the right response would be found, because so much
was at stake. The breakdown in July had more to do with politics than economics as the
major breakthrough, or “quantum leap” from the Uruguay Round, was within reach.
Domestic politics in a certain country were not encouraging and this resulted in very different
expectations on the right “exchange rate” for necessary trade-offs within the triangle of
issues. These political difficulties could be overcome if the right balance between ambition
and realism was found, while still ensuring that the round generated real new market
opportunities. A “dollar for dollar” parity between domestic subsidy reductions and market
access was neither realistic nor acceptable to the vast majority of WTO Members.
2.
Getting back to the negotiating table would require everyone being ready to play
their part in the give and take of negotiations, particularly in areas such as agricultural market
access. While the EC was willing to improve its offer towards the level proposed by the G20,
this would only make sense if other key partners also moved towards the middle ground. The
cross-Atlantic partner needed to give a serious signal on real cuts in trade-distorting domestic
support. All countries, with the exception of the weakest, needed to make a contribution,
particularly emerging economies. In July, neither Brazil nor India (nor other key emerging
economies) had needed to reveal more of their cards on NAMA; that moment had yet to
arrive. The developmental aspects, both offensive and defensive special and differential
treatment (SDT), needed to be effectively integrated. Development should remain the
overarching objective of the Doha Development Agenda and some issues (Aid for Trade, an
enhanced Integrated Framework, duty-free and quota-free market access, or LDCs and
cotton), should be moved forward on a fast-track basis. However, effective integration of
SDT – where relevant – in the resulting agreements would imply a negotiated "scale of
contributions" to the Doha negotiations from the developed countries through to the LDCs.
Importantly, a pro-development outcome would require developing countries to accept an
appropriate level of commitments. Regarding Aid for Trade, the EU had pledged to increase
collective spending, with the expected overall increase in ODA and several other EU
initiatives (e.g. EU-Africa partnership for infrastructure); these represented a platform for
increased, demand-driven support.
3.
The representative of Brazil recalled that the Director-General of the WTO had had
no other option but to interrupt the Doha negotiations because of the difficult situation faced
by WTO Members. The Director-General was now doing his best to ensure that the round
resumed. Brazil would also very much like to see the round resume as soon as possible, but
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was conscious that there was only a short window of opportunity. There were two central
areas in the Doha negotiations where progress was needed – agriculture and development
issues – and both were interlinked. These two elements needed to be placed at the heart of the
multilateral trading system if negotiations were to be successful. Support existed for the
successful conclusion of the round, but a degree of quiet diplomacy would be needed to reach
it. The central blocking issue in the negotiations was the issue of agriculture and the
interrelation between market access and domestic support. The major players had major
responsibilities in unblocking these negotiations. Movement in agriculture would lead to a
substantial improvement in market access, which was consistent with the Doha mandate and
recognized the different conditions of developing countries. Real and effective cuts in
domestic support on the part of the major players were needed; however, this did not
necessarily mean a “dollar for dollar” exchange between trade-distorting policies in
agriculture and market access. Major agricultural players who maintained trade-distorting
policies and supported agriculture with billions of dollars of subsidies should now move to
unblock them. Developing countries in a position to do so could thereafter do their part – in
agriculture but also in NAMA and services – and remove some of the distortions, including
anti-dumping measures.
4.
The representative of Kenya said that the decision taken at Doha to place
development at the centre of the negotiations had been a milestone. The aim was to address
the development needs and concerns of developing countries by unblocking the potential of
international trade to contribute to development and poverty reduction. Participating in the
negotiations had a cost implication for Kenya and other developing countries, as it spent
resources from its limited budget that could otherwise have been spent on education,
medicine and shelters in order to ensure that it remained engaged and that the country’s
interests were taken into account. The slow progress and the suspension of the round was a
major concern to developing countries and they were now keen for negotiations to be
resumed. Positions on core issues remained polarized after Hong Kong, and the lack of
agreement on modalities in agriculture and NAMA prevented progress in all other areas,
including the work on special and differential treatment and implementation issues. Kenya
supported the immediate resumption of negotiations. A development-oriented conclusion
would facilitate the integration of developing countries into the multilateral trading system
and promote policy coherence at the multilateral level. A failure would signal lack of interest
in development. Agriculture negotiations needed to remain at the core of the negotiations. A
reduction in subsidies in developed countries would pull millions out of poverty; but only if
accompanied by supply-side improvements. The Aid for Trade initiative was to be welcomed
and UNCTAD should play a vital role in its implementation. UNCTAD’s analysis and
research on negotiation issues, particularly on agriculture and NAMA, was appreciated and
the international community and donors should assist UNCTAD to continue its analytical
work.
5.
The representative of Mexico said that international trade continued to be one of the
engines of development. Developing countries had in recent years been a source of growth of
international trade, and this had resulted in unprecedented sustainable and rapid economic
growth. For economic growth to be sustainable, it was important to enhance the multilateral
trade system. Mexico had a wide range of trade agreements, but attached the utmost
importance to a solid multilateral system to foster development that provided predictability to
economic actors and prevented commercial wars. Developing countries were the most
affected by the rebirth of protectionist forces, and it was therefore important for negotiations
to be resumed as soon as possible; this would require political will and flexibility from all
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Members, and particularly from those countries with a key role to play in enabling the
resumption. The agriculture issue should be resolved urgently in order to unblock
negotiations; this required an improvement in the offer by the United States on domestic
support and by the EU on market access in agriculture. In addition, satisfactory solutions
should be found on NAMA, services and rules. This implied that all Members needed to
demonstrate flexibility in taking into account the needs of LDCs and the adverse impacts of
erosion of preferences, as well as the possible negative effects on developing countries.
Effective market access, matched with special and differential treatment provisions, was the
best contribution that could be made to the growth and development of developing countries.
UNCTAD should continue to contribute to the negotiations through its three pillars: research
and analysis, technical assistance and consensus-building.
6.
The representative of Canada applauded the leadership of the Secretary-General of
UNCTAD in implementing a number of new strategies for UNCTAD to fulfil its
development mission and contribute to the fundamental policy debate. The collective efforts
being made by member States to enhance the Integrated Framework (IF) served as a reminder
that development was at the core of UNCTAD's work and the Doha round. Canada supported
a successful conclusion of the Doha negotiations; an ambitious outcome in terms of market
access, reductions in subsidies and strengthened trade rules would deliver the most significant
gains to developing countries and LDCs. However, work on parallel issues such as the
enhanced IF and Aid for Trade were critical elements that would create the conditions in
which developing countries and LDCs could truly benefit from trade. Aid for Trade was part
of the WTO agenda, was not conditional on the outcome of the Doha round, and was not
attached to market access negotiations. Market access and strengthened rules were not in
themselves enough; developing countries and LDCs required the necessary support to take
advantage of the Doha round outcome and benefit from any market access provided. The IF
Task Force and its recommendations had outlined key points for improving the IF as a
mechanism to help bridge the gaps in institutional capacity in LDCs; this would make it
possible for them to leverage opportunities available through trade liberalization and meet
development challenges. Canada continued to support UNCTAD, particularly in the
preparations for UNCTAD XII.
7.
The representative of Egypt said that the Doha negotiations had reached a stalemate
due to a clear lack of political will on the part of the major trading partners to address the
main outstanding issues, particularly agriculture. Developing countries needed to gain true
and unrestricted market access for their agricultural products if the negotiations on agriculture
were to move forward. The negotiations on NAMA, services and special and differential
treatment had been addressed in Hong Kong. However, there were still stumbling blocks such
as NAMA and Aid for Trade which, when taken together with the issue of special and
differential treatment, had been held hostage by the negotiations on agriculture. Member
States had different perspectives: some viewed the negotiations from a purely market access
perspective, while other developing country Members regarded them from a developmental
angle. Thus, the challenge remained how to reconcile the two diverging perspectives. The
credibility of the WTO and the multilateral trading system were at stake if the negotiations
failed or were suspended indefinitely. Major trading partners had a responsibility to relaunch
negotiations, and it was only through an ambitious outcome that the round’s development
objectives would be delivered. It was to be hoped that current consultations would result in an
early resumption of the negotiations based on well-established mandates and that the right
formula combining political will and honest leadership would be found for the round to be
successfully concluded. For this be achieved, key players would need to show the necessary
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flexibility. It was important to take into consideration the wider international economic and
trading system that went beyond the WTO and which was composed of bilateral and regional
spaces, as well as the interfaces and linkages between the two.
8.
The representative of the United States of America said that her country was
disappointed over the suspension of the Doha negotiations, but remained committed to
unblocking the negotiations. The United States was seeking a balanced, comprehensive and
ambitious outcome across the board, including NAMA and services; agriculture was the key,
and a solution there was the necessary condition for success, but it was not the sole condition.
Economics rather than politics were the root cause of the suspension. The United States had
already made significant proposals that would require changes to its subsidies programme,
but its offer was not a "take it or leave it” proposition. Ambition was important not only in
subsidies but also in market access, since the Doha mandate did not establish a hierarchy
among agricultural pillars. Strong results in market access were particularly important, as the
vast majority of the gains were expected from that pillar. The existing proposal did not meet
the objective owing to high bound rates or various exceptions ("Black Box"). As regards
NAMA, a substantial meaningful result to create real market access was needed, especially in
the emerging countries, while taking into account the concern of small and vulnerable
economies. The findings of UNCTAD's expert meetings showed that liberalization of
services was critical, particularly in infrastructure, financial services, distribution, energy,
telecom and logistics services. The United States was the largest single donor in the area of
trade-related technical assistance, particularly for LDCs in the context of Aid for Trade. As a
way forward, major players should launch initiatives and make significant contributions
without waiting to see “who goes first”. The United States was ready to do so by proposing
additional cuts in its subsidies programmes provided that other key partners made
improvements in agricultural market access. It was important to pursue quiet conversations in
order to explore various options.
9.
The representative of Chile recalled that UNCTAD had contributed to a greater
understanding of the concept of development and performed valuable work and that its
studies had had an impact on the debate on best practices on sustainable development.
UNCTAD member States had discussed how UNCTAD should adapt its work to meet
current needs, and how it should improve its efficiency to ensure that it could meet the
challenges of a globalized world. UNCTAD should continue to provide developing countries
with the best policy tools to allow them to reap the benefits of the multilateral trade system.
The recent report by the Panel of Eminent Persons chaired by former Brazilian President, Mr.
Cardozo, should play an important role in this debate. Organizations that were not able to
face challenges risked becoming irrelevant. Referring to the discussion in the Trade and
Development Report 2006, Chile noted that there had been no discussion of fishery subsidies.
It was important for developing countries to address fishery subsidies, as they encouraged
over-catch of marine resources, which was an environmental threat and diminished the
competitiveness of other developing countries active in this sector.
10.
The representative of China, referring to the suspension of the Doha round
negotiations, pointed out that agriculture had been sidelined, along with other issues of
importance to developing countries, such as special and differential treatment, non-tariff
barriers, Customs duties and quotas. This had jeopardized the round’s development content,
as well as the multilateral trading system. The successful conclusion of the Doha round
would be essential to improve the multilateral trading system for the purposes of
development, poverty alleviation and achievement of the Millennium Development Goals.
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Failure to conclude the round would most likely lead to increased protectionism, and this was
not in the interest of developing countries. China had played a positive role in efforts to reach
a successful completion of the Doha round and had worked constructively for an immediate
resumption of negotiations. All countries now needed to demonstrate political will and
flexibility and take time for thought. UNCTAD’s three pillars could be used advantageously
in this context to relaunch negotiations, establish confidence and give prominence to
development, which could be expressed in practical terms though improved market access for
developing countries, as well as special and differential treatment. This would enable
developing countries to benefit from the Doha round. UNCTAD’s work in assisting
developing counties in the process of accession to the WTO was appreciated. China was
conscious of the importance of supply capacity building, competitiveness and infrastructure
building, as well as the importance of UNCTAD playing a role through Aid for Trade.
11.
The representative of Angola, speaking on behalf of the African Group, said that
African countries were participating in the Doha negotiations with the aim of using trade as
an engine to achieve their trade and development goals. The African Group attached
importance to reductions in trade barriers, including non-tariff barriers, imposed on products
of export interest to African countries. The Group was also interested in the elimination of
agricultural export subsidies and substantial reductions in domestic support, the enhancement
of domestic policy space, and greater discretion in the use of a range of policy measures for
building and strengthening supply response and competitiveness.
12.
The suspension of the Doha negotiations should not lead to a lower level of ambition
concerning the development objectives set out in the Doha mandate. Coherence between
trade negotiation outcomes and the implementation of the MDGs should be ensured. African
countries had high expectations on Aid for Trade, which should aim to generate financial
resources commensurate with their needs. UNCTAD’s technical assistance and capacitybuilding support in the Doha negotiations, in particular programmes such as JITAP, SADC
services capacity-building, and general advisory and technical support for African countries,
were appreciated. Africa now needed to work more towards supply capacity-building.
UNCTAD was expected to be a key actor in any Aid for Trade mechanism at national,
regional and global levels.
13.
The African Group understood that multilateral liberalization could be substantial
and rapid, but this was likely to impose immediate negative effects on many African
countries in terms of preference erosion; fiscal revenue, output and employment losses; food
import bills; and import surges. It was therefore necessary to find ways of mitigating the
adjustment costs of liberalization and economic reform. It was to be hoped that such concerns
could be taken into account in the final results of the Doha negotiations.
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